Cyanotech Corporation
Q3 2019 Earnings Call Transcript
Published:
- Mawae Morton:
- Thank you all for joining us today on the earnings call for Cyanotech Corporation. We are pleased to report Cyanotech's Third Quarter Fiscal Year 2019 Earnings Results. On the call today you've myself, Mawae Morton, Chief Executive Officer for Cyanotech Corporation and Mr. Brian Orlopp. I would like to start the earnings call with our corporate mission statement which is fulfilling the promise of whole health through Hawaiian microalgae. So at this stage I'm pleased to introduce our new Chief Financial Officer Mr. Brian Orlopp who will make a safe harbor statement.
- Brian Orlopp:
- Thank you, Mawae. Let me start by saying our discussion today may include forward-looking statements. We do not undertake any obligation to update forward-looking statements either as a result of new information, future events, or otherwise. Our actual results may differ materially from what is described in these forward-looking statements. Some of the factors that may cause results to differ are listed in our publicly filed documents. For additional information, we encourage you to review our 10-Q and 10-K filings with the Securities and Exchange Commission.
- Mawae Morton:
- Thank you, Brian. Before I start to review our financial results for the third quarter I would like to point out the third quarter achieved record sales for an individual quarter by achieving over $10 million in net sales, a $894,000 improvement from a year ago. While we are encouraged by the record sales numbers for the quarter we remain unsatisfied with current profit margins and you can see your focus on improving both margin and profitability. Since we did not receive any questions from shareholders regarding Q3 filing I will conclude the with a brief statement after Brian shares the financial results.
- Brian Orlopp:
- Thanks, Mawae. Now let's go through the results for the third quarter. As mentioned total revenues for quarter increased $894,000 or 9.8% as compared to the prior year period. A $658,000 due to increased spirulina sales a 21.3% increase. Prior year quarter sales were previously constrained by limited product availability. Astaxanthin sales increased as well $236,000 or 9% as compared to the same quarter last year. Included in the astaxanthin sales is a $1.2 million increase in sales to Amazon and Costco, partially offset by a decrease in international sales of $700,000. Despite the sales increase [indiscernible] profit was $4.12 million, down a $124,000 from the same quarter last year. Gross profit as a percentage of sales 41% as compared to the same period last year of 46.3% a decrease of 5.3%. This primarily due to higher astaxanthin cost as a result of lower production of 18% as compared with the third quarter of fiscal 2018. Operating expenses increased $471,000 from the same period of the prior year primarily attributable to higher advertising and promotional cost. General and administrative expenses remain consistent with the same time period of the prior year. Net income was $288,000 for the quarter versus $1.1 million for the same quarter last year. Diluted earnings were $0.05 in the current quarter compared to $0.19 per share in the prior year. Now back to Mawae.
- Mawae Morton:
- Thanks, Brian. Although we did not receive any questions from shareholders I would like to take this opportunity to share few concluding comments. We updated our most recent quarterly sales performance which reflects positively [indiscernible] past year. While the quarter's profitability is unsatisfactory we are pleased with the quarter to quarter improvement in the top line numbers, I do want to also reiterate that the unpredictable nature of agriculture will always present challenges for production here in the farm but we are determined to improving stability of supply to support our farm proposition [ph]. We will continue to improve our cultivation techniques and technologies and remain committed to deepening our brand awareness in the consumer market. We will also continue to explore potential new revenue opportunities including leveraging our unique super critical extraction capacity and expertise to perform extraction services for other companies. With improved profitability the company will be in a better position to self-fund the various opportunities for growth that we foresee in both the immediate future and the longer term. We thank you all for joining the call today.
- Q -: